Trauma Insurance

Compare a range of trauma insurance offers in one place with Savvy today.

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, updated on July 19th, 2023       

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Life Insurance

We’ve partnered with Compare Club to bring you a range of life insurance policies to help you compare them side by side.

If you’re critically ill or suffer a serious injury which is covered by your policy, trauma insurance can act as a valuable source of funds to support you and your loved ones. Because there’s a wide range of options available on the market, it's important to take the time to consider your options carefully before you buy.

By comparing with Savvy, you’ll be able to weigh up the ins and outs of different trauma insurance policies based on their cost, inclusions, exclusions, claim limits and more. Start the process of comparing by filling out a simple online quote with us today. 

What is trauma insurance and how does it work?

Trauma cover is a type of life insurance which can offer cover if you fall critically ill or suffer from a significant injury. It can be suitable for more immediate incidents or diagnoses, but also for longer-term conditions such as Alzheimer’s disease or Parkinson’s disease. If your condition is deemed claimable by your insurer, you can be paid a lump sum on diagnosis to help you cover the immediate cost of getting back on your feet, such as medical expenses and other financial needs, and focus on your recovery.

The amount you’re paid will be agreed upon when you take out your policy, with some insurers offering up to a maximum of $2 million worth of coverage. The amount you’re insured for can have a direct impact on the cost of your insurance; for instance, if you choose a larger sum, your premium will likely be higher than it would be for a smaller insured sum.

The emotional and physical trauma involved with serious injury and illness is enough to bear, but the impact on your finances can be another major concern. Trauma insurance can allow you to continue your recovery and limit the stress felt by your loved ones by ensuring your finances are covered.

What is covered by trauma insurance?

Trauma insurance policies can include a wide array of critical illnesses or serious injuries, though these may vary between policies and are subject to your insurer’s terms and conditions. Some of these can include:

  1. Heart conditions: heart conditions are common in later life, with about 1.2 million Australians suffering from a heart-related issue. Trauma insurance can offer cover for a range of heart conditions, including heart disease, heart attacks, open heart surgery and cardiac arrest. 
  2. Cancer: your policy may be able to give you or your loved ones the necessary financial support to allow you to recover without concerns surrounding your finances. However, not all types of cancer will be covered, so it’s important to check with your insurer before you buy your policy so you can be aware of what is and isn’t covered.
  3. Major organ transplants: if you have a major organ transplant due to a specific organ failure, trauma insurance may be able to cover you so you can focus on the road to recovery.
  4. Stroke: your chances of suffering a stroke increase the older you get. If you suffer a stroke, you’ll likely be out of work for a long period, so it’s important to know that your policy may offer protection in this area.
  5. Paralysis or loss of limbs: if you’re involved in an accident which leaves you partially or fully paralysed or without one or more of your limbs, trauma insurance may be able to cover it.
  6. Severe burns: if you’re involved in an accident which causes significant burns, your trauma insurance can cover you, such as costs related to skin grafts.
  7. Alzheimer’s: while early-onset Alzheimer’s might not render you unable to work immediately, you will eventually need to retire as the disease progresses. Trauma insurance can cover you and give you the financial assistance you need.

What’s not included in trauma insurance?

When taking out trauma insurance, it’s important you’re aware of specific exclusions and situations where your claim may be rejected. These may include:

  1. Self-harm or suicide: serious injuries or critical illnesses as a result of self-harm typically won’t be covered by trauma insurance policies. Death or disability as a result of an attempted suicide may also be excluded. However, similar to other life insurance policies, a suicide clause may be in place and stand for the first 13 months of your cover, after which it may be covered.
  2. Failure to disclose a pre-existing medical condition: if you don’t disclose a pre-existing medical condition to your insurer, you could have a claim related to that condition rejected.
  3. Events occurring within a waiting period: these policies may have a waiting period in place at the beginning of your cover. For example, with some insurers, you may not be able to claim for cancer or heart attack within the first 90 days of the policy being in place.

It's crucial to be fully aware of any exclusions which may apply to your policy, which is why it’s essential to compare offers and read PDS documents so you can be clear on what you are and aren’t covered for.

What’s the difference between trauma insurance, total and permanent disability (TPD) insurance and income protection insurance?

It’s important to be aware of and understand the differences between different types of life insurance. The differences between trauma, TPD and income protection cover are the following: 

  • Trauma insurance: this cover pays out on diagnosis of a serious illness such as cancer. This cover is paid out through a lump sum amount, which may be up to $2 million with some insurers. Trauma cover is not available in your superannuation, unlike many other forms of life insurance.
  • TPD insurancethis can provide you and your loved ones with cover if you’re permanently disabled and unable to work ever again, either in your current job or any position suited to your education and qualifications. This also comes with a lump sum payout, with some insurers enabling claim limits of up to $3 million to $5 million.
  • Income protection insuranceunder this type of insurance, you can be covered if you’re temporarily unable to return to work due to illness or injury. Unlike the other two types of insurance, you can claim an ongoing benefit of up to 70% of your salary (subject to your insurer’s terms and conditions) for an agreed period.

Types of life insurance

Why compare life insurance through Savvy?

What factors influence the cost of trauma insurance?

The pros and cons of trauma insurance

PROS

Features a broad range of inclusions

Trauma insurance policies can offer wide-ranging cover for an extensive list of illnesses, diseases and injuries.

Pays out on diagnosis

Your trauma insurance policy can pay out your sum insured upon receiving your diagnosis, meaning you could receive your funds quickly and focus on your recovery.

Tax-free lump sum payment

No matter how large your lump sum payment is, you or your family won’t be required to pay tax on it in most cases.

Free to choose how you spend your lump sum

When you get your lump sum payout, you can use the money for whatever you wish. Whether it be to pay off urgent debts, medical expenses or living costs, the choice is yours.

Peace of mind

Should you suffer a serious medical incident which is covered by your policy, you and your family can have peace of mind that you’ll be able to make a claim.

CONS

Doesn’t cover all illnesses or injuries

Although there’s a wide range of conditions included in trauma insurance, there are still serious illnesses or injuries which you may not be covered for.

Strict rules on pre-existing health conditions

Should an insurer determine that your pre-existing health condition may increase the chances of you suffering a specific condition, they may exclude cover for that particular benefit or apply loading to your policy.

Subject to waiting periods

Your cover will typically be subject to a waiting period of 90 days (with some insurers). As such, you may have to wait if you suffer from a major illness or injury after you buy your policy.

Top tips for comparing trauma insurance with Savvy

Compare inclusions and exclusions

It’s crucial to take the time to consider what is and isn’t included in your policy quote so you aren’t met with any unwelcome surprises when you go to make a claim. You can dive into the details by analysing the PDS of different insurers to see what their terms and conditions are before you apply.

Consider the cost of premiums

Although the cheapest policy won’t always provide you with the best deal, it’s still valuable to compare offers based on their price. By doing so, you can work out which policy offers you the coverage you need at the most affordable price, as striking a balance between the two is key.

Look at the claim limits available

Consider how much you and your family may need if you’re diagnosed with a critical illness or suffer a serious injury. You should also account for how your household budget may be affected both by supporting the cost of your treatment and your lack of income (if you’re unable to work).

Think about any other benefits which may apply

Your policy isn’t just about the lump sum coverage you’re insured for, however. It’s worth taking the time to see if you’re offered other benefits as part of your agreement, such as discounts, cover suspension, worldwide cover and inflation-proofing (increases your cover in line with inflation).

Frequently asked questions about trauma insurance

How do I apply for trauma insurance with Savvy?

The quote and policy purchase process for trauma insurance through Savvy involves the following:

  • Get a quote:firstly, tell us about you. You’ll need to share information about the cover you’re after, as well as personal details to help us formulate the quote for your profile.
  • Compare policies:from there, you’ll be presented with all the offers available based on your quote from our partner’s panel of insurers. You can compare their cost, coverage and more and, if you’ve found one you like, you can schedule a call back from a specialist.
  • Purchase your policy:if everything is to your liking after your discussion with your specialist, you can go ahead and purchase your policy. 
Do I really need trauma insurance?

When breaking down if you need trauma insurance, you should consider the following:

  • The lump sum amount you and your family would need if you were out of work for a long period.
  • If you have private health insurance, consider how much of your medical expenses it could pay for.
  • Should you have income protection insurance, this could contribute to your financial needs if you’re critically ill or seriously injured.
  • The support available to you from family and friends, both financially and physically (such as taking care of your kids).
Should I choose level or stepped trauma insurance premiums?

Level and stepped premiums are the two choices you can generally make when purchasing life insurance. The differences between them are:

  • Level premiums: by choosing level premiums, your payments will largely remain the same and only increase when your insurer opts to raise their premium rates. By choosing level premiums, the cost at the beginning may be more expensive, but it could be cheaper when you’re older.
  • Stepped premiums: a stepped premium can be considerably cheaper initially than level premiums. However, the cost will increase year on year as it’s influenced by your age and choice of policy. Before taking out a stepped trauma insurance premium, make sure you account for the increasing costs and ensure you can afford it in the long run.
Can I pay for trauma insurance through my super?

No – trauma insurance is no longer available through your super fund. However, if you’re with a super fund which used to offer trauma insurance, you may find you are still covered. Check your member statement or contact your super fund if you’re unsure.

Can my lump sum amount from trauma insurance contribute towards my mortgage?

Yes – how you spend your money is up to you. Your trauma insurance lump sum can go towards any debts or bills you have to pay, including your mortgage. 

Does trauma insurance cover COVID-19-related claims?

There are certain situations where some insurers may be able to approve your claim if you’ve tested positive for COVID-19. For example, if you contract the virus and it either results in one of the conditions covered by your policy or you’re hospitalised in intensive care, you may be able to make a trauma insurance claim. It’s important to check with your insurer and familiarise yourself with your PDS to make sure you’re across what is and isn’t covered under your policy.

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Disclaimer:

Savvy is partnered with Compare Club Australia Pty Ltd (AFS representative number 001279036) of Alternative Media Pty Ltd (AFS License number 486326) to provide readers with a variety of life insurance policies to compare. Savvy earns a commission from Compare Club each time a customer buys a life insurance policy via our website. We don’t arrange for products to be purchased from these brands directly, as all purchases are conducted via Compare Club.

Savvy does not compare all life insurance policies or providers currently operating in the market. Any advice presented above or on other pages is general in nature and doesn’t consider your personal or business objectives, needs or finances. It’s always important to consider whether advice is suitable for you before purchasing an insurance policy.

For any further information on the variety of insurers compared by Compare Club or how their business works, you can read their Financial Services Guide.